In Customer Relationships, Context Is King

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Seeing things in context is one of the most important features of human intelligence, and it plays a vital role in our relationships with others, including the relationship that a customer has with a company. By focusing on deepening the context of your customer relationships, you can ensure greater customer loyalty and probably higher margins as well.

Start with the fact that all relationships are inherently interactive, by definition. Relationships involve communication back and forth between two parties, and we expect the other party to respond and react to our input just as we respond and react to theirs. When a relationship develops a deep context, the interactions become more efficient. I can say less and less, but because of our previous interactions (i.e., the context of our relationship) you’ll understand more and more.

When a customer tells you how she likes her product configured or delivered, for instance, and you remember her preferences when she buys again, you are using the context of the relationship to save time and trouble both for her and for your firm. Context streamlines the interaction when you rent a car and don’t have to stop at the counter to fill out another contract from scratch, or when you buy from an online retailer and don’t have to re-input your credit card details or home address.

But to be competitively successful, you should go far beyond simple credit card and address data, because the deeper the context of a customer relationship, the stronger it will be. What if your customers could specify their preferred sizes, colors, added features and other product configuration details, along with their preferred delivery times? What if they could specify how often they want to be communicated with, or how much additional warranty coverage they prefer, or what day of the month they prefer to be invoiced? Or what if your product itself were embedded with information technology allowing it to “recognize” a customer and remember the customer’s previous settings in order to conform itself to their use more and more individually?

The point is, the more an individual customer interacts with you to specify what she needs or how she needs it, the deeper the context of your relationship can be, provided that you can continue to meet her individual preferences. And, a deeper relationship context increases the customer’s loyalty, if for no other reason than that it has become harder for her to start from scratch with a different provider. This is also the most reliable way to maintain your margins, because when your offer is individualized it is no longer simply a commodity. The customer herself has collaborated with you to create the most unique and valuable product-service configuration for her--so the service you are now providing was jointly created.

Developing context-rich relationships with customers requires you to treat different customers differently, by zeroing in on the different preferences that individual customers have, and remembering them. This may sound particularly difficult if you’ve come to think of your product or service as commodity-like, with competition taking place largely in terms of price and promotion. But even for the most commodity-like of products, there will still be differences in the way customers perceive, desire, and use the product. Here are a few of the questions you could ask yourself, in order to uncover context-building differences among your customers:

•How might different customers prefer your product in terms of its features or capabilities, size and fit, weight, color, design, style, timing, or frequency?
•What do different customers do differently with your product?
•How might different customers prefer the invoicing to be done, or the packaging, palletization, promotion, communication, or service support?
•Can you save your customer time or effort by remembering some detail or specification?
•What additional tasks does your customer have to accomplish to gain use out of your product, and what role could you play in helping them to accomplish these tasks?
•Are there particular types of customers with more complex problems or management issues?
•What ancillary services do your customers need in conjunction with your product?

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4 Comments

  • fresh thoughts

    Good post.  It is essential to give preference to the customers feedback. When a customer gets a feel that his opinion is given importance he tends to become loyal towards the store. Each store must provide importance to increase customer loyalty.

  • Iqbal Rizesa

    Strong emphasis on customer's preferences. Noted. However, how do we know that customer's intangible preferences will not change? We can always store credit card data as well as home address because they are concrete data and do not change often. But intangible preferences like color, design and desired additional features always evolve. So how do we manage these?

  • Steve Ardire

    > When a relationship develops a deep context, the interactions become more efficient.

    and effective !

    Good post !

  • JAN ZLOTNICK

    Peppers as usual, drives us back, and always forward, to powerful idea of Trust. YES, CONTEXT-RICH relationships with customers require CMOs to treat customers differently...BUT, "thinking of your product or service as commodity-like, with competition taking place largely in terms of price and promotion" is itself a lack of trust in brand and customer -- and a sleepy surrender to "CONTEXT-EMPTY" strategic thinking.  Conceding to the existence of "commodity-like" products, or brands, is a result of lazy customer-insight research and marketing strategy. Which is a lack of trust in the very alive and rich, contextual differences in the way customers perceive, desire, and use NOT JUST the product, but in the way they perceive, desire and use (Trust or mistrust in) their own lives, careers, and personal relationships.